Algeria to privatise banks following drop in oil prices
The country's state-owned banks will soon list on the local stock exchange.Algeria's six state-owned banks will soon list on the local stock exchange, the government has announced.
A senior financial official told Reuters that the objective is to contribute to developing the country's financial market and to diversify banks' sources of funding following the drop in oil prices.
The plan will open the door for foreign investors to acquire controlling stakes in banks, reversing a rule requiring Algerian firms to keep a majority shareholding in any partnership with foreigners, the official added.
The country's financial system has been affected by the dramatic fall in oil prices (down 44 per cent between June and December 2015), which had immediate effects on the economy, given that the hydrocarbon sector accounts for 58 per cent of government revenues and 28 per cent of GDP, according to figures from the African Development Bank.
In January 2016, the Central Bank of Algeria announced plans to inject cash in the financial system to bail out banks, which have seen their resources dip significantly in 2015.
The overall liquidity of banks was estimated at 1,828 billion dinars (€15.3 billion) in September 2015, against 2,730 billion dinars in 2014.